Beer prices still up beyond duty hike, despite MTI warning

SINGAPORE — Coffeeshops have continued to price their beers beyond the calculated excise duty of 41 cents, even though the Ministry of Trade and Industry (MTI) had warned businesses about profiteering.

A check on 10 coffeeshops found that all have left their prices at the 50 cents mark-up they implemented following the 25-per-cent increase in excise duties on alcohol. Coffeeshops cited a number of reasons: That they were just matching their prices to competitors and that the recommended 41-cent increment was hard to implement, hence the rounded mark-up instead of absorbing the S$0.01 cost per beer bottle.

“If you want to call that profiteering, I’ve no choice. I think a 50-cent increase is fair and I haven’t had complaints on my end. But if you increase the price by S$1 or more, then that’s profiteering,” said Food Xchange Supervisor Chris Ng.

He added the coffeeshop did consider marking the price up by 45 cents, but felt customers would find 5 cent change a hassle and that banks have additional charges for taking in 5-cent coins.

Coffeeshops which received complaints from their customers said those mutterings lasted only for a few days and business has not been affected. Ms Leong Gaik Har, who has worked at Vari Nice Eating House for 11 years, said: “Our beer at S$6.30 is still cheaper than our competitors’. It’s been a long time since our last increase.”

The Consumers Association of Singapore (CASE) said it has received 23 complaints about beer price hike thus far, even though the consumer watchdog said it has not received further complaints since March 18. After it released its undercover survey results on March 12 that found eight out of 11 vendors had marked up their Tiger bottles (633ml) by between S$0.50 and S$1.30, the consumer watchdog received three more complaints, said Executive Director Seah Seng Choon.

Mr Seah said the 50-cents increase is “quite close to the excise tax amount”, but if in cases where the hike goes up to a dollar or beyond, CASE will write to the vendor and ask for justification on the excessive hike. “Most say its due to tax and other cost,” he said. But if vendors misrepresent the increase by blaming it on the excise tax, “then we will take them on”.

“They will be in breach of the Consumer Protection (Fair Trading) Act by putting up misinformation and CASE, as well as the consumer, can take them to court,” he said.

The MTI said it has been working “closely” with CASE and the Competition Commission of Singapore (CCS) to monitor the market for any unfair pricing and anti-competitive behaviour, and will continue to do so.

The MTI spokesperson, which felt that CASE’s survey “will help to improve transparency and allow consumers to make informed choices”, added, the “CCS will continue to monitor the market and not hesitate to act if there is evidence of anti-competitive behaviour such as collusion or coordination of prices among businesses”.

Consumers TODAY spoke to said even though they found the increase expensive, they were resigned to the prices. Retiree, Mr Tan, 60, who was at an S11 coffeeshop in Ang Mo Kio, said the price increase will remain despite complaints and coffeeshops can always use rental hikes as an excuse.

“They will tell you that if you think it’s expensive, don’t come. Buy from the supermarket and drink at home,” he said, adding that there are cheaper places to patronise, but he picks those with bigger spaces and are more comfortable. “At the very most, you can drink less frequently,” said another consumer, Mr Li Xicai, 30.

Correction: The original article stated the Consumers Association of Singapore Executive Director's name as Mr Seah Choon Seng. This is incorrect. His name is Mr Seah Seng Choon. We apologise for the error. This article was edited on April 14, 2014 at 2.45pm.